GOP’s tax cut package and economic growth

Re “GOP Reaches Accord on Tax Cut Package,” May 10

U.S. Sen. Charles Schumer (D-N.Y.) thinks the new Republican tax bill helps only the wealthy. The Times article notes that it would protect those who make $75,000 to $100,000 a year from the unintended ravages of the alternative minimum tax. Given the cost of living in Southern California, I doubt that anyone in that tax bracket would consider themselves rich.

So a hearty thank you to Schumer and other Democratic leaders for giving a head’s up on exactly whom they think has excess income and thus should be heavily taxed, so that these targets can make sure to vote Republican.

PETER RICH

Los Angeles

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How can a $70-billion tax break be considered a “cost” according to your recent article? It is an increase of money to taxpayers and businesses, all of which flows into the economy and almost always increases tax revenues flowing to the government. Remember, federal and state income and corporate tax receipts increased after the Bush tax cuts in recent years.

TOM KERR

Calabasas

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Re “Give-and-take in Washington,” editorial, May 11

You questioned the idea that the Bush tax cuts spurred economic growth by saying, “Yet neither economic nor job growth began in earnest until a few years after the first tax cuts were enacted. And both had more to do with increased corporate profits and spending than any change in tax policy.”

The lag between the tax cuts and the economic growth follows the models taught in basic economic textbooks. Second, corporate profits are very much related to taxes. A tax cut influences and increases profits, which then helps the economy. And third, the same logic applies to spending. When taxes go down, discretionary income goes up. Tax revenue is up $137 billion so far this year. Because of the economic growth that is a direct result of the tax cuts, the government has been taking in more money, thereby reducing the deficit. The problem with the deficit is spending, not revenue.

MICHAEL MENSSEN

Rexburg, Idaho